BoE's Huw Pill: Interest rate cuts possible as 'reward' for lower inflation

'When rather than if'

The Bank of England’s chief economist, Huw Pill, argued the question for the central bank’s Monetary Policy Committee has become when to start lowering interest rates, rather than if.

In an online forum on Monday (5 February), Pill said key inflation indicators were not yet at a level that would allow policymakers to start easing policy, but argued he did not need to see underlying inflation reach its 2% target to begin cutting rates. "We do not need to see inflation get back to 2% on an underlying basis in order to begin to reduce the bank rate because we are at a restrictive level. We can reduce the bank rate a little bit and monetary policy would still be restrictive," he said. Bank of England holds at 5.25% and predicts higher rates into 2027 The chief econo...